Unpublished Disposition, 925 F.2d 1469 (9th Cir. 1988)

MEMORANDUM^* 

Abe Feinsilber appeals the district court's grant of Unipacific Corporation's summary judgment motion. The court held that his breach of contract action was barred by the statute of limitations. Feinsilber also appeals the court's denial of his motion for leave to amend his complaint. We affirm in part, reverse in part, and remand.

FACTS

Feinsilber is in the business of repairing defective electronic devices returned to manufacturers and retailers. In 1984, Unipacific employee Ted Rullman called Feinsilber to inform him that Unipacific "was going to contract out the services on repairs of certain electronic equipment." Feinsilber claims that "Rullman implied that [Unipacific] was going to fire its own technicians."¹  He told Feinsilber to call Unipacific's General Manager, William Kranzush to set up an appointment.

In April 1985, Feinsilber flew from Illinois to California to meet with Kranzush where they allegedly entered into an oral agreement whereby Unipacific agreed to provide Feinsilber with 4,300 to 5,000 units per week as long as units were available and Feinsilber's work met Unipacific's expectations (90 to 95% repair success rate). At that time, units were expected to be available for at least five years given Unipacific's backlog. Feinsilber was to be paid on a per unit basis.

According to Feinsilber, he requested a written contract embodying the terms of the oral agreement and Kranzush said he would mail it to Chicago. In June 1985, Feinsilber met Rullman and Kranzush in Chicago who told him they hoped he "moved soon."²  On August 5, 1985, Feinsilber arrived in Burbank. He asked Kranzush to give him "some kind of a written agreement" for his bank in order to secure a home loan. On August 16, 1985, presumably in response to Feinsilber's request, Kranzush sent him a letter which stated in relevant part:

As we have discussed many times in the past Unitech does have immediate need for your services and as you know you have come highly recommended.

At this point it still appears the quantities discussed of 4,300--5,000 units per week are valid to our best estimates. Each model will be negotiated on an individual price basis for your labor and parts will be supplied on a consignment basis to start.

Please contact me next week so that we may set up an appointment to finalize the method of payment along with the procedures involved with product transfer and scheduling.

Feinsilber picked up his first load on October 7, 1985, but he did not receive 4,300 units, nor was he the exclusive repair person. He continued to work for Unipacific but he received fewer than the number of promised units per week (for the entire month of January, for example, he received 20 to 30 units per week). Finally, on June 30, 1986, the plant manager told Feinsilber he would receive no more units.

PROCEDURAL HISTORY

Feinsilber filed a complaint on June 13, 1988. He alleged that Unipacific breached a partly oral (based on the April 1985 conversation) and a partly written (based on the Kranzush letter) contract. He also asserted a promissory estoppel claim. He alleged the breach began in the fall of 1985 and continued until June 30, 1986. Unipacific moved for summary judgment based on the two-year statute of limitations governing disputes over oral contracts (as opposed to the four-year statute for written contracts). Cal.Civ.Proc.Code Secs. 337, 339 (Deering 1972). Feinsilber moved for leave to amend his complaint with claims for breach of a written contract (based on the same Kranzush letter) and promissory estoppel, thereby omitting any reference to an oral contract.

On the summary judgment motion, the district court concluded the letter was not a contract, but simply an offer to Feinsilber. The court reasoned, if any contract existed, it was oral. The court held that any alleged breach of the oral contract occurred on October 7, 1985, when Feinsilber picked up his first load and realized he would be receiving fewer than 4,300 units per week and he was not Unipacific's exclusive technician. Thus, the court granted Unipacific's summary judgment motion finding the action barred by the two-year statute of limitations.

As for the motion to amend, the court concluded the proposed breach of a written contract claim was essentially a promissory estoppel claim as the letter did not constitute a written agreement. Based on the court's finding that the breach occurred in October 1985, it held that the two year statute of limitations also barred both proposed promissory estoppel claims. Accordingly, the district court denied his motion for leave to amend.

DISCUSSION

Summary Judgment Motion

A grant of summary judgment is reviewed de novo. Kruso v. International Telephone and Telegraph Corp., 872 F.2d 1416, 1421 (9th Cir. 1989), cert. denied, 110 S. Ct. 3217 (1990). We must determine, viewing the evidence in the light most favorable to Feinsilber, whether there were any genuine issues of material fact and whether the district court correctly applied the relevant substantive law. Tzung v. State Farm Fire and Casualty Co., 873 F.2d 1338, 1339-40 (9th Cir. 1989).

Feinsilber argues an issue of material fact existed as to whether he entered into a written contract with Unipacific. Feinsilber argues Kranzush's letter constituted such a written agreement. Unipacific asserts that the letter did not contain any of the necessary terms of the alleged contract, i.e., price, duration, and quantity.

On its face, the letter appears more like a letter of intent than a contract. The letter does not specify price, time of performance, place of performance, method of payment or duration. For statute of limitations purposes, " [t]he requirement is ... that there be a writing containing all terms and that the party to be charged have accepted it." E.O.C. Ord, Inc. v. Kovakovich, 246 Cal. Rptr. 456, 460 (Ct.App.1988). Although the letter mentions potential issues that might be addressed in a contract, the letter itself falls short of spelling out the specific terms. Instead, Kranzush asked Feinsilber to contact him in order to negotiate further terms of the business relationship. Therefore, there was no genuine issue of material fact as to the existence of a written contract. We find that if any contract existed, at most it was an oral one. Thus, the district court properly concluded that the two-year statute of limitations applied. We affirm the district court's summary judgment as to Feinsilber's written contract claim.

Feinsilber further argues an issue of material fact existed as to whether he entered into an oral contract with Unipacific. In April 1985, Feinsilber flew to California and met with Kranzush to discuss a potential business relationship. Feinsilber alleges that during that meeting they agreed on price, duration and quantity. We find that viewing the evidence in the light most favorable to Feinsilber, it is possible that an oral contract was entered into when he met with Kranzush. Before we are able to decide whether the district court erred by granting summary judgment as to the oral contract claim based on the two-year statute of limitations, we must determine when the breach of the alleged oral contract occurred.

"It has long been established a cause of action based upon a breach of contract accrues at the time of the breach." E.O.C. Ord, 246 Cal. Rptr. at 462. Thus, if an oral contract existed, Feinsilber was entitled to bring his cause of action in October 1985 when he picked up his first load of less than 4,300 units and realized he was not the only Unipacific technician. He did not file his complaint, however, until June 13, 1988, more than two years after the first breach occurred.

We refer to that breach as the first breach because we construe the alleged oral contract as imposing a continuing obligation on Unipacific to provide Feinsilber with a specified number of units weekly, and a corresponding obligation on Feinsilber to repair them. In Woodard v. Glenwood Lumber Co., 171 Cal. 513 (1915), a lumber company contracted with a landowner to cut down timber, manufacture it into lumber, and ship it. The landowner was to be paid by the foot of lumber. The company stopped working in July 1908, but the landowner did not bring a complaint until two years later. The Woodard court stated, "the obligation to cut down the timber ... was a continuing covenant. Every day's failure, without justification, to resume operations was a new breach of the contract, and the fact the plaintiff may have waived the breach up to a given time did not preclude him from asserting a subsequent breach." Id. at 523. The court further noted that "if, in fact, all of the breaches alleged had been waived, this was a matter of defense." Id. at 525. See also Boman v. Santa Clara County, 153 Cal. App. 2d 707, 713, 315 P.2d 67 (1957) ("In the continuing obligation cases, a waiver of a breach up to a certain time does not necessarily preclude the promisee from asserting a subsequent breach.").

Thus, each week Feinsilber received fewer than 4,300 units, a new breach of the alleged oral contract occurred. Due to the two-year statute of limitations, however, claims based on breaches occurring before June 13, 1986 are barred. Accordingly, claims based on breaches occurring on and after June 13, 1986, are not barred. We conclude that summary judgment in favor of Unipacific as to breaches of the oral contract occurring on and subsequent to June 13, 1986 were not barred by the California statute of limitations. We therefore reverse the summary judgment as to alleged breaches occurring on or after June 13, 1986.

Motion for Leave to Amend

Feinsilber sought to supplant his original complaint alleging one count of breach of a "partly oral/partly written" contract and one count of promissory estoppel with an amended complaint alleging one count of breach of a written contract and the same promissory estoppel count. Finding both essentially promissory estoppel claims barred by the two-year statute of limitations, the district court denied Feinsilber's motion. The denial of leave to amend after a responsive pleading has been filed is reviewed for an abuse of discretion. Thomas-Lazear v. FBI, 851 F.2d 1202, 1206 (9th Cir. 1988).

The proposed breach of a written agreement claim is based on the same letter as the partly oral/partly written contract claim. Based on our analysis of the Kranzush letter, see supra, the written contract claim lacks merit. The district court, therefore, did not abuse its discretion in refusing to allow Feinsilber to amend his complaint with this claim.

As for the promissory estoppel claim, the same claim remains in the original complaint. Based on our determination that some of the alleged breaches as well as the final termination of the contract occurred on and after June 13, 1986, the promissory estoppel claim is not barred as to damages accruing from those breaches. Because, however, that claim remains in the original complaint, the district court did not abuse its discretion by refusing Feinsilber's motion to amend his complaint with an identical claim.

In sum, we find that the district court did not abuse its discretion in refusing Feinsilber's request to amend his complaint. Therefore, the original complaint stands.

CONCLUSION

Summary judgment was appropriate as to the written contract claims, and as to claims arising from breaches of the oral contract occurring before June 13, 1986. Summary judgment was inappropriate, however, as to the oral contract and promissory estoppel claims arising from the breaches occurring on and after June 13, 1986. Thus, we reverse in part the court's granting of Unipacific's summary judgment motion, affirm its denial of Feinsilber's motion for leave to amend, and remand for further proceedings consistent with this memorandum.

REVERSED in part, AFFIRMED in part, and REMANDED.